Keep those American ports open
The Straits Times, Asia News Network, Singapore
The shutdown of 29 ports on the west coast of the United States presented President George W. Bush with one of his trickiest challenges, balancing economic priorities with security concerns. He should have acted sooner to keep the ports open and international trade flowing.
On Tuesday, he obtained a court order forcing the docks' temporary re-opening. The judge will hold a hearing in a week on whether to approve the federal government's request for a full 80-day continuation of business, provided for under the Taft- Hartley Act. While this is a holding action, it provides critical breathing space for the U.S. and its trading partners, not least those in Asia. Singapore has intimated that if the closures continued much longer, it would knock back its forecast growth of 3 to 4 percent for the year.
But the spectre of a prolonged closure has not gone away with the court action. The deadlock between the Pacific Maritime Association of port operators and shipping lines and the International Longshore and Warehouse Union is not due to a simple employer-employee dispute over work procedures. It is not a disagreement over the introduction of productivity-enhancing technology. It is about power. Employers want the power to preserve profits. Unions want the power to preserve jobs. This is a fundamental conflict that is unlikely to be resolved easily, a cooling-off period and federal mediation notwithstanding.
While such arguments may have been little more than a sideshow previously, the world has changed, transforming the importance of the ports and their workers too. In 1971, when American dock workers crippled west coast ports, the U.S. was not dependent on imports to the degree it is now. Nor was globalization as advanced. Richard Nixon, the president then, could afford to take 104 days to end the paralysis. Today, the ports handle 253 million revenue tons of cargo a year, four times that of three decades ago, and half the entire nation's imports and exports.
More important, a substantial portion of that cargo consists of just-in-time items. A feature of lean inventory practices, these need to arrive at specific times so that factory production can continue or shop shelves can be re-stocked. Already, the shutdown, which began on Sept. 27, has hit both sides of the Pacific. The damage to the U.S. economy is estimated at US$2 billion (S$3.58 billion) a day, with the hurt spread over a wide area, from Boeing's production of 767 and 777 aircraft in Seattle disrupted by delays in imports of fuselage panels and cargo doors, to food importers' perishables languishing in refrigerated containers at the docks. The impact on Asia is no less dramatic as the ports are its main gateway to the U.S. market.
Some are casting the port fight as a duel between rapacious management and victimized workers locked out until they agree to unfair terms in new contracts. Others are accusing the longshoremen, who are earning between US$114,400 and US$137,500 a year, of thwarting the introduction of new technology by asking for unacceptable concessions and then initiating a damaging go- slow after management refused to give in.
Whichever side one favors, one thing is clear: This time, the world cannot wait for three months for their dispute to be sorted out. With congressional elections weeks away, Bush must have known that intervention would come at some cost to his Republican party. Yet he moved, putting the country above party. This demonstrates awareness that domestic industrial disputes can have an international dimension as critical as the fear of terrorism.